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Saturday, May 12, 2018

Bangladeshi Inequality

The latest Household Income and Expenditure Survey released by Bangladesh Bureau of Statistics (BBS) found that the income share of the poorest five percent of our population was 0.23 percent of overall income, a sharp fall from 2010 when it was 0.78 percent. In contrast, the richest 5 percent's share of income grew to 27.89 percent, up from 24.61 percent in 2010. This basically means that the bottom five percent's share of national income has decreased, whereas the richest five percent's has increased.According to estimates by the Centre for Policy Dialogue (CPD), wealth inequality in terms of Gini coefficient—an economic term to gauge income or wealth inequality on a scale of 0 to 1, in which 1 represents perfect inequality and 0 signifies perfect equality—stands at a staggering 0.74, whereas the Gini coefficient for income inequality is 0.48.China-based Hurun Global in 2017 named one Bangladeshi businessman in its global rich list, estimating that his assets would be worth USD 1.3 billion. The businessman conceded that the company his family owns may have had assets worth the figure but that he “personally” does not own that much wealth. In the last Dhaka mayoral election, two contestants, both business tycoons, refused to include their expensive cars in their wealth statements. They argued that these cars belonged to their companies, which, however, happened to be owned by none other than themselves.They pretend that their “personal” wealth and that of their companies are somehow different, even though it's pretty clear that both are more or less the same thing. For all their wealth, it's hard to find too many wealthy businessmen in the list of the top taxpayers. The man who paid the highest amount of tax last year was the owner of a chewing tobacco company.Far from taxing the richest, successive governments rather succumb to the business community's demands to reduce the existing taxes in the name of providing “incentives”. When labourers take to the streets to demand a wage increase, the government on behalf of industry leaders, deploy forces to crush their voices. According to a study by the Finance Ministry, 45-65 percent of the assets in our economy are not taxed. As the super-rich have ample ways to evade their dues, a large portion of the government's revenue comes from indirect taxation such as value added taxes (VAT), which is applicable to all people regardless of their income. Those who are poor spend a large proportion of their income, whereas the rich spend a very small portion of theirs.https://www.thedailystar.net/opinion/economics/why-bangladeshs-inequality-likely-rise-1575079